ISRAEL – French supermarket chain Carrefour is set to set up shop in Israel following the signing of a franchise agreement with Israeli company Electra Consumer Products.
Carrefour is the eighth-largest retailer in the world by revenue and operates a chain of supermarkets and convenience stores.
It currently has 13,900 branches worldwide and a sales turnover of €81.2 billion, according to latest figures from the company.
As part of the move, Electra said it will rebrand local supermarket chain Yeinot Bitan and Mega supermarket chains into the Carrefour brand just six months after purchasing them.
The franchise agreement with Carrefour is set to be for 20 years, with the possibility of extending it for another 20, according to report by Israeli daily Haaretz.
Carrefour’s first Israel branches are set to open by the end of 2022 kicking off a process that will see more than 150 Yeinot Bitan Mega locations converted to Carrefour-branded stores, alongside the opening of new Carrefour locations.
President of Carrefour’s International Division Patrick Lasfargues said, “We are happy to have signed this agreement, which once again demonstrates the robust foundations of Carrefour’s international franchise strategy.
We are sure that Carrefour’s advent in Israel with help significantly in improving the local buying experience and will strengthen the purchasing power of the consumer, who will receive better products at more affordable prices.”
For the time being, Electra will take the Carrefour name and will be able to import its private-label products into Israel at low prices.
However, it has a long way to go in terms of operations, positioning and marketing the Carrefour Brand in Isreal.
The company will need to fundamentally renovate its neglected branches, entailing an investment of millions of shekels (Israeli currency) per branch, depending on size.
Analysts also project that Electra will also need to make a separate investment of more than 400 million shekels (US$121m) in order to bring Carrefour into the Israeli consumer consciousness.
Considerable investment will also be needed to Kasher the private-label products (some of which are already kosher), which number more than 10,000 products total – a process that may take a number of months.
Nevertheless, Carrefour’s entry into Israel is the biggest and most significant move ever in the history of retailing in Israel.
As a leading global chain and as one of the largest food and consumer products producers in the world, Carrefour is expected to enable Electra Consumer Products lead the food and consumer products market in Israel.
Liked this article? Subscribe to Food Business Africa News, our regular email newsletters with the latest news insights from Africa and the World’s food and agro industry. SUBSCRIBE HERE
